Fed issues cease-and-desist order against former Barclay’s FX head

A cease-and-desist order against a former employee of a New York bank and a prohibition order against a former Texas banker were made public Thursday by the Federal Reserve.

In a release, the Fed said it had issued a cease-and-desist order against Peter Little, a former employee of Barclays Bank PLC, New York, N.Y., for engaging in manipulative and collusive foreign exchange trading practices.

According to the order, in 2018 the Fed issued a notice of intent to prohibit and notice of civil money penalty (CMP) against Little, who was formerly the head of the G-10 foreign exchange (FX) and spot trading desk at the bank, for allegedly attempting to manipulate benchmark currency rates; exchanging confidential information and coordinating FX trades with competitors; and failing to supervise his subordinates “in violation of Barclays’s policies, and which caused financial loss to Barclays.”

Under the cease-and-desist order, which Little consented to, he is barred from participating in any manner in the FX trading affairs of any bank or federally insured financial institution without the Fed’s permission (and even if gets permission, he must inform the bank of the order, among other things). The Fed also slapped Little with a $25,000 CMP.

Meanwhile, the Fed also announced that it has prohibited Raul Cavazos, a former employee of Texas Community Bank in Laredo, from future bank employment. According to the prohibition order, Cavazos (a teller at the bank) allegedly transferred cash from his working teller drawer to head teller Adriana Montemayor, who allegedly misappropriated funds (including those shared by Cavazos) for her personal benefit.

“Cavazos also caused Montemayor to transfer cash from her working teller drawer to him from time to time for his personal benefit,” the Fed also alleged.

The Fed said that Montemayor’s conduct contributed to a $74,000 loss by the bank (which she has repaid), and that Cavazos’ conduct “constituted violations of law or regulation, unsafe or unsound practices, and breaches of fiduciary duty.”

Federal Reserve Board issues enforcement actions with former employee of Barclays Bank PLC and former employee of Texas Community Bank